U.S. Treasury's Mnuchin says new investment curbs not specific to China

Reuters Staff

3 Min Read

WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin said on Monday that forthcoming investment restrictions from the department will not be specific to China but would apply “to all countries that are trying to steal our technology.”

FILE PHOTO: United States Secretary of the Treasury Steven Mnuchin arrives at a news conference after the G7 Finance Ministers Summit in Whistler, British Columbia, Canada, June 2, 2018. REUTERS/BEN NELMS

In a Twitter message, Mnuchin said stories on investment restrictions from Bloomberg and the Wall Street Journal “are false, fake news.”

A government official told Reuters on Sunday night that the Treasury was drafting curbs that would block firms with at least 25 percent Chinese ownership from buying U.S. companies with “industrially significant technology.”

Mnuchin’s tweet came amid a difference of opinion among top Trump administration officials on how aggressive an approach should be taken in challenging China’s trade practices. The administration is still debating some aspects of the new investment restrictions that are set to be announced on Friday, a government official said.

The disagreements were also about U.S. tariffs on $34 billion worth of Chinese goods that are scheduled to go into effect on July 6, which China said would trigger retaliation involving its imports of American soybeans and motor vehicles.

Mnuchin has been on the more moderate side of the debate, along with White House economic adviser Larry Kudlow, who is recovering from a heart attack. Arguing for a more aggressive approach to tariffs and investment restrictions on China are White House trade and manufacturing adviser Peter Navarro and U.S. Trade Representative Robert Lighthizer.

Last month, Mnuchin said a trade war with China was “on hold” after officials of the world’s two largest economies held talks in Beijing that were focused on opening more sectors of China’s economy and increasing purchases of American goods.

But on May 29, the White House announced that the Trump administration would proceed with a 25 percent tariff on $50 billion of Chinese goods and China-specific investment restrictions.

“To protect our national security, the United States will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology,” the White House said in the statement. “The proposed investment restrictions and enhanced export controls will be announced by June 30, 2018, and they will be implemented shortly thereafter.”

Lighthizer said that getting China to open its market to more U.S. exports was significant, but that it was far more important for the United States to resolve issues with China such as forced technology transfers and cyber theft.

Reporting by David Lawder and David Shepardson; Editing by Phil Berlowitz